THE CEO of AutoZone has warned customers that they could be facing price hikes within weeks, depending on the outcome of the upcoming election.
Drivers are only just starting to feel the easing of the highest inflation on record, but new tax plans could see them out of pocket all over again.
AutoZone’s CEO has warned that customers could face hiked prices within weeks[/caption]
He blamed President Trump’s plan to introduce tariffs on foreign imports if he wins next week’s election[/caption]
Many are touting November 5’s face-off between Donald Trump and Kamala Harris as the “most important election ever” for the future of the nation.
But one of the less discussed elements of the debate between the two candidates is their approach to import taxes.
President Trump has pledged to encourage American manufacturing by placing 10% tariffs on products brought in from any other country around the world (rising to 60% on Chinese products).
The Republican firebrand claims that this will bring in extra revenue from international firms and force markets like the EU and South East Asia to buy more American goods.
Speaking at a rally this week, Mr Trump said other countries would “pay a big price” for not buying enough from the US.
Using the example of the European market, he said: “I’ll tell you what, the European Union sounds so nice, so lovely, right?
“All the nice European little countries that get together.
“They don’t take our cars.
“They don’t take our farm products.
“They sell millions and millions of cars in the United States.
“No, no, no, they are going to have to pay a big price.”
But some business leaders have expressed their concerns that the burden will fall on American consumers as it is generally US firms who pay tariffs at the time their goods arrive in the country.
Philip Daniele, CEO of AutoZone, told investors that the company was readying itself for their import costs to increase significantly if Mr Trump wins a second term.
Many of AutoZone’s products are partly or fully supplied from India, China and Germany.
And Mr Daniele indicated that the extra cost would be handed on to ordinary Americans in the form of higher prices.
Speaking on a recent earnings call, he said: “If we get tariffs, we will pass those tariff costs back to the consumer.
“We’ll generally raise prices ahead of — we know what the tariffs will be — we generally raise prices ahead of that.”
It is not clear exactly how much prices will increase as the full tariff programme has not yet been introduced but, if the whole hike is passed on, then it could theoretically mean prices on some items going up by 60%.
